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ETH Drops 20% as Jump Crypto Liquidates Staked Ether Positions, Blockchain Data Indicates
- ETH’s price has dropped sharply in the last two weeks, down almost 30%.
- Jump Crypto is mainly responsible for ETH’s current downfall, as the firm has been liquidating hundreds of millions worth of ETH.
- Most cryptocurrencies are in the red, with BTC below US$57K.
Ether (ETH) has fallen below US$2,400 (AU$3,692), representing a 20% decline in the last 24 hours. The price drop follows a bearish shift in the crypto market, which plunged to US$1.9 trillion (AU$2.9tn) over the last few days.
Data from CoinGecko shows that the crypto market cap has fallen by 10% in the last 24 hours, with Bitcoin (BTC) and other large-cap currencies dropping by double digits. Not only are crypto prices sliding, but so are US stocks.
Meanwhile, it seems Ethereum can’t catch a break this year —the second-largest coin is down 28% in the last two weeks.
Related: Bitcoin and Ethereum ETFs Flows Suffer Setback Amid Lacklustre Trading Day
Thanks, Jump Crypto
Ethereum’s recent price slide coincides with Jump Crypto liquidating around US$300M (AU$462M) from a single wallet in the past two weeks. According to data from Arkham Intelligence, Jump Crypto, which is the crypto arm of Jump Trading, sent hundreds of millions of dollars from hot wallets to exchange deposit addresses.
Usually, when whales transfer from personal hot wallets to exchange deposit addresses, they are likely profit-selling or liquidating positions that went south. In this case, data shows the trading firm moved over US$300M worth of ETH by August 3 to wallets from exchanges such as Coinbase, Binance, and Gate.io.
On-chain analyst Ember CN pointed out how Jump Crypto began redeeming Lido’s wstETH in late July. To explain this in simple terms (or somewhat simple), wstETH is the wrapped version of stETH, which is Staked Ether.
The reason for its creation is that stETH is incompatible with certain decentralised finance (DeFi) protocols that require assets with constant balances, and stETH’s price is constantly changing. That said, stETH is wrapped to maintain a steady balance and allow you to use it across multiple DeFi protocols (without losing your original staking rewards).
Arkham data shows Jump Trading has over US$100M in wstETH remaining.
Related: Ethereum ETFs Record Positive Inflows, Overtaking BTC Fund Flows: Could This Be a Turning Point?
The cherry on top is that Jump Crypto started redeeming wstETH into ETH on July 25, two days after the US Securities and Exchange Commission (SEC) approved the first nine spot Ethereum exchange-traded funds (ETFs). The good news (maybe?) is that ETH is still up 28.49% in the yearly chart.
Author
José Oramas
José is a journalist and translator with a keen interest in blockchain and cryptocurrencies.
